Trail Blazers Blog

Payday lending bills get Senate approval

Senators took the plunge into payday lending reform Monday, passing two House bills that bring some oversight to the largely unregulated industry in Texas.

Sen. John Carona, R-Dallas, said the legislation represents a “very, very delicate compromise” between consumer groups and the payday and auto title lending industry.

The legislation by Rep. Vicki Truitt, R-Keller, requires more disclosures by lenders about their fees and requires the companies to obtain licenses and report data to a state agency.

Sen. Wendy Davis, D-Fort Worth, and Sen. Royce West, D-Dallas, pushed for stronger regulation and a cap on fees. The Truitt proposals don’t cap fees, which can often climb as high as 500 percent.

Those who take out payday loans and cannot pay them off roll them over, incurring even more fees and sometimes falling into a cycle of debt.

“Historically, Texas has taken a hands-off approach to the regulation of this industry,” Davis said in an impassioned speech, urging senators to think of those who get trapped in rolled over loans. “They’re poor, they’re voiceless and they’re not here in the halls of the Capitol.”

Davis and West said they wanted to add several amendments to the legislation, but decided not to in most cases so as not to endanger the bills’ passage. West did try an amendment, and it was was tabled. Davis said the bills make “the smallest little advancement,” but include some steps backward.

“If we don’t pass something, we will simply set us back two more years,” Carona said. He said there will be further examination of the industry before the next legislative session in 2013.

Consumer groups like Texas Impact, AARP and the Baptist Christian Life Commission backed the bills, as did the Consumer Service Alliance of Texas, an industry group.

A third bill by Truitt with more stringent restrictions on the lenders didn’t garner industry support and died in the House. The two surviving bills, which were amended in the Senate, now head back to the House.

Editor Picks

Ad:TopLeftBlog

Ad: Position1

Archives Title

Archives

ArchivesAbout this blog

About this Blog

The blog for the Dallas Morning News politics team tracks Dallas Fort Worth area, Texas and national campaigns.